Trump to Propose Slashing Medicaid, Giving States Power to Limit Other Benefits

The Trump Administration plans to reveal its first major budget proposal on Tuesday and it will include large cuts to Medicaid and call for more state powers in limiting benefits. The Trump budget plan calls for a reduction of $800 billion to Medicaid over the next decade. The proposals also call for allowing states more flexibility to impose work requirements for people in anti-poverty programs. The proposals are contingent upon the House approved American Health Care Act being passed in the Senate and signed into law by President Trump. The proposal would not only roll back the Medicaid expansion that many states conducted after the Affordable Care Act was passed, but would also prohibit new states from expanding Medicaid.

The proposal for Medicaid cuts could clash with the views of some Senate Republicans who are reluctant to make major cuts to the Medicaid program. The budget proposal is also expected to include recommendations to change the food stamps program SNAP. Critics of the changes argue that allowing work requirements creates blanket ultimatums that do not take into account a recipient’s age, physical or cognitive state, or limitations caused by local economies. Critics also argue that many of these benefits are already low and do not replace the income one could earn from a job anyway. Another criticism is that implementing work requirements could be seen as a precursor for stricter requirements including drug testing that courts have rejected in the past.

President Trump has indicated to OMB Director Mick Mulvaney that he does not want cuts to Medicare or the Social Security retirement program to be included in the budget proposal. Some details of the President’s budget plans were revealed in March when the President revealed plans to increase military spending and provide some funding for his proposed border wall. Medicaid and SNAP are not the only antipoverty programs the Administration has in its crosshairs as the White House signaled that it wanted to eliminate federal funding for other programs such as Habitat for Humanity, subsidized school lunches, and the U.S. Interagency Council on Homelessness.

It remains to be seen how much of the Trump Administration’s proposals are actually adopted by Congress is passing a budget as the Republican caucus has a wide variety of views on entitlement programs. Furthermore, depending on the type of Medicaid cuts that come to pass, there may be an ancillary effect on enforcement of the False Claims Act in terms of enforcement on fraudulent billing for Medicaid simply due to less money being available.

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